I don’t know if this story will make it to newspaper dailies tomorrow. What I do know is someone is very bullish on the Philippines.
JP Morgan is a global financial services giant, Wiki says one of the oldest in the world. In May, it was third in the Philippine Stock Exchange’s broker ranking.
Last month, it held its first investor conference in the Philippines since the 1997 Asian financial crisis. Now, it’s saying the key Philippine Stock Market index (PSEi) may reach 4,400 by mid-2008. Reminds me of the “blue skies” foreseen by Association of Securities Analysts of the Philippines (ASAP) president Francisco Liboro. He said in this article that once the market hits 3,700, the sky’s the limit. That means the market will be in uncharted territory.
If you agree with JP Morgan, wait before the market dips a little before adding to your equity fund holdings. Stock analysts believe the market is likely to undergo some correction in the next few days. Buy low, so you can maximize your returns. Then hold on tight. It might not be too late to ride the bull run after all.
It’s increasingly hard to find pessimists these days. If you don’t think the market and the economy will grow well this coming year, do let me know and tell me why. I’m interested in finding “contrarians.” 
So What Chocnut snippet:
What is the PSEi?
It’s the Philippine stock market’s key index, composed of a basket of 29 companies. It used to be called the Phisix. It’s a widely accepted barometer of stock price movements. The composition of the PSEi was modified last year to make sure stocks included in the index meet rigid criteria.
Do not confuse the PSEi with the PSE itself. The PSE is a private organization that ensures an efficient market for the buying and selling of shares, “efficient” being a relative term of course, in case you are going to compare the PSE with the Dow Jones or the NASDAQ.
Other business articles for those who want to be in the know:
Gov’t proposes P1.227T budget for 2008
Government is the country’s biggest “economic entity.” Its budget is a major factor in how the economy moves. I used to pore over national government budget documents at the DBM. Lots of stories there.
(UPDATE) Shares close higher on bargain hunting
Mining boom amid buoyant metals prices
This article gives a very good situationer on the mining industry.
BSP siphons off P200B in excess liquidity
Can you imagine that kind of money “sloshing” all over our financial system? Scary.
Money changer, 4 others nabbed for duping balikbayan
Practical note if you intend to travel to the Philippines with dollars in your pockets, or you know someone who will. Small money changers may offer better rates to lure you. Be sure you are not alone, even if you feel you can trust your friendly neighborhood changer and be sure they count the money well in front of you. Uhh…You know what? Go for more secure establishments instead.
June 19th, 2007 at 3:07 pm
hi angie, sorry for the inconvenience. Our search features have never been our strongest suit (sigh). To go to the article, just copy and paste this link:
http://business.inquirer.net/money/topstories/view_article.php?article_id=70880
Or, you may simply click on “this story” in the first paragraph of this blog post.
June 19th, 2007 at 2:54 am
Hi salve–
I cant understand why I couldnt locate the article “JP Morgan sees key index rising to 4,400 by mid-2008″. One Yahoo egroup member provided me the link and I was directed to that article. But when I typed in that title in Inquirer’s search box, it yielded 2 results, but I cudn’t get to that article by neither of the 2 links. Thanks!
June 16th, 2007 at 7:21 am
In my previous life as an FX trader, we basically use technical analysis as basis for buy/sell decisions because of the lack of market news to sustain an 18 to 20 hour trading day. The idea behind this approach is that the “price” of a security is the sum total of all factors that affects its present value and by studying the patterns of movements that led to where it is at the moment, can predict it’s most probable future direction.
Saw a newspaper headline yesterday (I think the inquirer) that says “stock prices at 80-year high”, the impression it created on most people who called me yesterday was the stock market is already at record high and is prone for a correction, the common question is whether its time to cash in on profits and maybe shift to “safer” fixed income instruments.
How high is high and how low is low? This is a question that even the most skilled technician may have difficulty in answering because as the price moves into uncharted territories (a chart break-out in tech parlance) their predictions of future movement will be as good as anybody else as the basis for their past decisions would have been effectively been voided as a result.
Phisix today at a new 80-year high of 3,670 level and onwards to 4,400?
My advice at this point to go back to basics and ascertain if the “reasons” for the initial take off three years ago is still valid and intact, and whether these reasons would continue to build upon itself and create a virtuous cycle? Are there any new factors that entered the equation? But most important is their personal comfort level in holding on to these “high-priced” securities because at the end of the day, our own personal objective and well-being should be the primary driver for any investment decisions.
Thanks
June 15th, 2007 at 10:03 pm
pinoy investor
i agree higher gain = higher risk. of course you must be a gifted stock picker to anticipate a price increase of 3% (allow 2% cost for buy/sell transactions) with net 1% gain on daily basis. in a bullish market the odds of most stock price increase exceeding 3% everyday is in your favor. but who ever heard of a trader who never lose a single trade for 1 year and made a 1300% gain.its like going to a casino with P100 and applying double or nothing bet. after winning the first game, next bet is P200 then P400 on the third and so on. if you get 20 straight wins how much do you think your P100 has accumulated. its over P104M. so you risk P100 to gain P104M but the chances of achieving is slim. but it could be fun.
June 15th, 2007 at 10:13 am
don2x:
The potential profit in daily trading is higher but so is the potential loss. Higher return, higher risk. If you want to quantify that risk, tabulate the profit/loss from daily closing prices for one year. Compute the annualized mean and standard deviation. The risk premium is mean plus std. dev. minus fixed income rate.
Assuming the risk premium is 10% and your fixed income rate is 20%, your target price should be at least 30% up. If the most optimistic forecast is 23% up, then the odds are against you. You’re taking too much risk given the potential return. Of course gamblers like to beat the odds and sometimes they do.